Importance of Control

Control is an important function of management. It is an essential feature of scientific management. It is a force which guides the management to a predetermined objective by means of predetermined policies and decisions. It helps the management in verifying whether everything occurs in conformity with the standards set. By bringing to light the variations from the standards stipulated in the plans and by pointing out the weakness and errors in order to rectify them and prevent recurrence it helps the management in realising adequate progress and satisfactory performance.

Control is the basis of planning and the essence of control is the adherence to plans. According to J. Batty, "without watchfulness and feed-back of an efficient control system, there is little likelihood that even the best plan will ever work out as expected." Control keeps a check on other functions of management so as to facilitate the management in achieving its objectives. As the control system covers almost all management activities, there is a possibility for the overall improvement in the organisational efficiency. Further, proper control smoothens the working of an organisation. As the control system strengthens the functioning of the company, the morale of the employees will be high. Again the existence of an efficient control system creates an atmosphere of order and discipline in the enterprise.

Approaches To Design Controls

William G.Ouchi suggests the following three approaches to design control system.

Market Control: This type throws light on a mechanism to be developed for controlling external market operations which involve standards to be fixed for achieving market share, price competition etc.

Bureaucratic Control: This approach stresses on organisational authority and relies on administrative and hierarchical mechanisms such as rules, regulations, procedures, policies, standardisation of activities, budgets, etc. to see that employees adapt themselves to these programmes and policies of the organisation to achieve goals. This throws light on monitoring employee behaviour towards organisational policies and programmes.

Clan Control: This provides inputs to design control systems through which employee behaviour is controlled by the shared values, norms, traditions, rituals, beliefs, and other aspects of organisation culture. This control system focuses on the behaviour of individuals or groups (clan) to monitor performance measures.

(Source: William G.Ouchi-"A Conceptual Framework for the Design of Organisational Control Mechanism." Management Science, 1970.)

Control Process or Essential Steps in Control Procedure

According to Prof. Newmann, the essential steps in a control process are:

(a) establishment of standards for measuring performance;

(b) checking and reporting on performance; and

(c) taking of corrective action.

(a) Establishment of standards: Standards are set to constitute criteria against which results can be measured. The standards which can be fixed for measuring performance are:

(i) Physical standards like quantities in units, man-hours, etc.

(ii) Cost standards such as cost per unit produced, material cost per unit, selling cost per unit of sale, etc.

(iii) Revenue standards such as annual sales for a department, etc.

(iv) Capital standards as the rate of return on capital invested, ratio of current assets to current liabilities, etc.

(v) Intangible standards such as competence of manager and employees, success of a public relations programme, morale etc.

(b) Checking and reporting on performance: To check performance against the pre-determined standards is the process of control. In other words, actual performance is compared with the standards fixed. For getting a correct idea of the variation from the standards fixed, it is necessary that standards are developed adequately and actual performance is measured accurately. Performance can be found out by a study of various summaries of figures, reports and statements. Similarly, the appraisal of performance of subordinates can be done by personal observation hen they are at work. A quick comparison of actual performance with the standards fixed is possible if the control system is well organised. The manager while comparing the performance with the standards fixed, has to find out not only the extent of variation but also the causes of variation. Some of the variations may be unimportant while some others may turn out to be important which need immediate corrective action by the manager. Managers may use techniques such as ratios, indexes, averages, control charts, etc. for appraising performance.

(c) Taking corrective action: The manager, after finding out the deviations from the prescribed standards, has to take steps to correct the deviations. There is need for the manager to take corrective action immediately so that the normal position can be restored without any delay. Further, the manager has to find out the causes of deviations. The causes of deviations may be due to inadequate communication, defective system of remuneration, defective system of selection of personnel, inadequate training of personnel, lack of motivation of subordinates, inadequate or outdated machinery, ineffective supervision, etc. Depending on the nature of causes, the manager has to take remedial action.

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